University of Bahrain
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Determinants of Credit and Financing Risk: Evidence of Dual Banking System in Indonesia

Show simple item record Sukmana, Raditya 2018-07-19T08:24:07Z 2018-07-19T08:24:07Z 2017-12-01
dc.identifier.issn 2469-259X
dc.description.abstract Given the fact that banking is the backbone of the Indonesian economy with a dual banking system, this paper seeks the determinants of Non-Performing Financing (NPF) and Non-Performing Loan (NPL) in Indonesia. Various techniques of econometric tools such as unit root, cointegration test and Impulse Response function are utilized with 129 number of observations (January 2004 to September 2014). Variables of capital, rates, loans, output, price, and exchange rate are adopted. The result shows that bank capital is important in influencing the credit and financing risk. Among the recommendations are for the government to maintain economic performance to keep NPF and NPLs as low as possible; and Financing Deposit Ratio-based Reserve Requirement policy (which is adopted only in Indonesia) imposed by the central bank seems to be effective in developing the real sector and should be adopted in conventional banks. This is because this policy “punish” bank which has low Financing Deposit Ratio. This paper covers comprehensive analysis on dual banking system in Indonesia, a country in which banks are the important engine of the economy and a country which has the largest muslim population. en_US
dc.language.iso en en_US
dc.publisher University of Bahrain en_US
dc.rights Attribution-NonCommercial-ShareAlike 4.0 International *
dc.rights.uri *
dc.subject Non Performing Loan en_US
dc.subject Non Performing Financing en_US
dc.subject Financing Risk en_US
dc.subject Credit Risk en_US
dc.subject Islamic bank en_US
dc.subject Conventional bank en_US
dc.title Determinants of Credit and Financing Risk: Evidence of Dual Banking System in Indonesia en_US
dc.type Article en_US
dc.volume 03
dc.issue 02
dc.pagestart 98
dc.pageend 112
dc.source.title Journal of Islamic Financial Studies
dc.abbreviatedsourcetitle JIFS

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